loader2
Login Open ICICI 3-in-1 Account

Open ICICI
3-in-1 Account

Manage your Savings, Demat and Trading Account conveniently at one place

+91

BLOG

CY25: Auto Volumes: Tale of Two Halves with GST 2.0 led Happy Endings!!

ICICIdirect Research 09 Jan 2026 DISCLAIMER

CY25 closes with healthy growth despite a slow start wherein Auto retail volumes reached 2.82 crore units (+7.7% YoY), with the year clearly split into two halves—subdued demand in Jan–Aug period followed by a sharp recovery from Sep–Dec after GST 2.0 improved affordability across segments.
Growth was broad-based with Passenger Vehicles (+9.7% YoY) and Tractors (+11.5% YoY) outperforming, while 2Ws (+7.2%) and CVs (+6.7%) delivered steady growth.
Fuel-mix transition deepens, led by EVs in 3Ws and CNG in PVs/CVs: EV penetration rose across categories, with 3W EVs at ~61% and 2W EVs at ~6.3%, while PV EVs remained modest at ~4%. CNG continued to gain relevance with ~21% share in PVs and ~11.8% in CVs, highlighting cost-driven adoption.
Rural demand outperformed urban, particularly in PVs where rural growth of +12.3% YoY exceeded urban growth of +8.1%, indicating widening personal mobility beyond metros.
Dealer confidence remains strong for the near term where about 75% of dealers expect growth over the next three months (JFM’26), supported by the marriage season, festival demand, FY-end buying and sustained post-GST 2.0 sentiment; finance turnaround time and stock availability remain key execution risks.
December’25 provides a strong year-end exit with retail volumes growing +14.6% YoY, led by PVs (+26.6%), CVs (+24.6%) and 3Ws (+36.1%), with rural PV demand (+32.4% YoY) significantly outperforming urban markets. Inventory and transition metrics also improved in December with PV inventory moderating to ~37–39 days
Wholesales for Dec’25 also came in healthy. CV (+25% YoY) & Tractors (+35% YoY) outperformed peers while healthy volumes were witnessed in the 2W & PV space as well.
We are selectively positive on the Auto space with top bets as Maruti Suzuki (BUY; Target: ₹18,700), M&M (BUY; Target: ₹ 4,180) in the OEM space

Download ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere

Download ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere